Equity markets took a breather overnight, as investors took some profit, after big gains either side of the weekend. European markets settled lower, despite an improvement in Consumer and Investor confidence, which still remain severely depressed. The virus continues to surge, but politicians have avoided the economically destructive lock-downs, seen in the first wave. UK/EU Brexit talks have recommenced and things do not look good. There needs to be some tacit agreement by October, but sharp divides remain, so the ‘No Deal’ WTO option looks the most likely. The USD continues to retreat, with the EUR jumping to 1.1735, while the GBP trades 1.2840.
US markets settled after huge gains over the previous couple of trading sessions. US Consumer Confidence is surging, as the country takes control of the virus, with effective treatments and an early promise of a vaccine. The Case Shiller Home Price Index continues to confirm strong gains in this important leading sector. Congressional House Democrats have proposed a further stimulus/bailout package, leading into the all-important Presidential Debate, which will be a big window in to the state of both candidates.
The US Dollar continues to retreat, as positive market sentiment returns, but equities remain deeply in the red for September. The trade exposed commodity currencies have been severely impacted by the negative sentiment and the safe haven status of the reserve. The recent rebound in market sentiment has allowed the AUD to regain 0.7100, while the NZD rose back to 0.6570, ahead of the key NZ Business Confidence number out today.